Purchase Solution

Jennifer expects to start college in five years.

Not what you're looking for?

Ask Custom Question

Jennifer expects to start college in five years. The school she wants to go to will cost $18,000 per year for the four years (assume payments at end of each year). Her parents started saving $3,000 per year five years ago and will continue to do so for five more years.

How much more will her parents have to invest each year for the next five years to have the funds required for Jennifer's education? Use 7% as the interest rate throughout the problem.

When you set up this problem, please write the formulas (such as PV = A * PVIF), rearrange each formula so that the unknown factor is on the left side of the equal sign, plug in the numbers, and then solve. If you follow this procedure, you will dramatically reduce the probability of making errors

Purchase this Solution

Solution Summary

The solution examines when Jennifer expects to start college in five years.

Solution Preview

The PV of school fees = 18000*PVIF(7%,6th year) +18000*PVIF(7%,7th year) = 18000*PVIF(7%,8th year)+ 18000*PVIF(7%,9th year)

The PV of $3000 annuity started 5 years ago ...

Purchase this Solution

Free BrainMass Quizzes

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Operations Management

This quiz tests a student's knowledge about Operations Management

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.